On the Saif Side

Want to Solve ER Overload? Give People Money Instead

Ran into an interesting post today re: Emergency Room overload

Emergency departments nationwide are being overwhelmed by the non-emergent, and doctors in general are asked to treat what doesn’t need treatment… 

At a time when we have an unprecedented obsession with health – Dr. Oz, The Doctors, Oprah and a host of daytime talk shows make the smallest issues seem like apocalyptic pandemics – we have substandard national wellness. This is largely because the media focuses on the exotic and the sensational and ignores the mundane. Our society has warped our perception of true risk. 

There are some entertaining thoughts in that post, but the main point made is: people are going to the ER unnecessarily, making it tougher on doctors and patients that truly need care. I’m not an expert in the space, but I’ll bet there are many in the medical industry that feel this way.  The question is, how do we fix it?*

In thinking of possible solutions, I’m reminded of a creative approach one health benefits provider took. Today, many corporations provide employees with $X (say, $100) to access certain services, e.g. prescription glasses. You have until the end of the year to spend it; and if you don’t, it’s lost. So what happens every December? Employees run out to their opticians, dentists and massage therapists to max out their benefits even if they don’t need them.  This is a net loss proposition. If I spent $100 on glasses I didn’t need, the company is out $100; but I didn’t really gain $100 in marginal value. 

I don’t recall the name of this health benefits provider, but their innovative (at the time) model was as follows: If your company allocated $100 worth of benefits to you but you didn’t use it, they would pay you 50% of it in cash. (In theory, this could be 99% and still work)  Win-win for all, since you just got $50 that you can use (instead of a pair of glasses you don’t need), and the company spent less than the $100 they spent previously. 

Is there an opportunity to extend this type of model to hospitals?  Looks like US’ health expenditure per person is ~$8,000 a year. What if everyone was allocated $8k at the beginning of the year, and then got a 50% credit for the money they didn’t spend? It would certainly reduce the number of unnecessary visits to the hospital.**

Would it also reduce the number of necessary visits — i.e. would people who need treatment decide to stay away so they can advantage of the credit? My guess is that it wouldn’t. But even it does happen, wouldn’t this number be lower than the number who can’t get timely treatment today because of ER overload?

Lots of unanswered questions and many (!) assertions, but I’m sure there’s a creative solution out there that’s worth experimenting with. Time for an enterprising entrepreneur to give it a shot. 

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* There are some startups trying to approach it from the preventative side, by gamifying active living. But my bet is that these tools won’t reduce the number of folks that go to the ER when they throw up after eating Mexican food. If they were going to go before, they’ll go now. 

** An argument can be made that this might cost more than what it currently does, but it might also cost less.  Since we can’t conclude either way without more projections and analysis, for the sake of this post, let’s assume the numbers stay the same.